Monday, July 27, 2015

I remembered 2-3 years ago, I read the production cost of gold is USD $1300. I got a surprise to see gold at such low.(Less than USD $1100)

I look up the internet and realized the top 10 gold miners/ producers are having AISC close to or even above current gold prices.

There are also plenty of debate about the adequacy of AISC (all in sustaining cost) and the actual cost should be higher.

But lets just take AISC, a metric develop by world gold council to account for the realistic costs of production, at face value.

See http://www.mining.com/top-gold-producers-margins-squeezed/

At USD $1200 per ounce, there are already plenty of news article a year ago saying that some miners will not be able to sustain production.

I took a brief look at the various presentations of Barrick, Newmount and Sabanye Gold, and notice that ASIC is falling since 2012, and I believe that is due to reduction in exploration capex, although I am not sure if all companies include this exploration capex under sustaining capex.

We are defintely not near the peak of the gold cycle, but the trough or how long the low will lasts is everybody guess.

I remember during crisis period, gold price is exploding, so I bought some as a hedge.

An article that I read pointed out that Gold Bear Market is extremely long while gold bull is short. In fact, there are many articles (Just google "gold investment") that ask people to stay out and let the low take it course.

Saturday, July 25, 2015

I had wanted to update my portfolio to include those from my wife's. In fact, I started the excel spreadsheet about a month ago, but never get to with it as I ponders over what are the information to include in the spreadsheet and also, due to the hectic schedule, I left it as it is.

I will just include the companies we had, no spreadsheet, in order of capital vested, if I remembered correctly. (^ Means owned by both accounts, * means by my wife account)

I have sold Singapore Shipping, ST engineering, CMPH twice, Venture and Ascendas Trust with profits.

I have cut losses with LMIR and Sembcorp Industries.

She has sold Singapore Shipping Corp, SIA with profits.

There are plenty of thoughts swirling in my mind as I think of how to write the blog post, in fact, it keeps swirling in my mind as I go to sleep. I hope it gets clearer as I blogged about it now. Pardon me if it is still incoherence.

I want to be clear, what I am saying now it just my own clear understanding of myself, I am not insulating anything against what other bloggers are doing when they share their portfolio

First, how should I track my portfolio?

My previous tracking is in terms of portfolio size and the unrealized profit and loss every quarter including dividends.

This do not satisfied me anymore as any portfolio size value will move with the market. A positive or negative value now serve no purpose.

With this, I asked why I am investing. I am clear about this, I want to build a retirement nest beside CPF, if by any stroke of luck it gets big earlier and I might "escape", that is good, if not, at least I do not want to be working beyond retirement age without a choice.

So tracking dividends like what some bloggers are doing might be a better gauge.

However, I believe in keeping a big warchest and also a big emergency fund now. I believe the more sustainable dividends given will be the ones bought at "wretched" prices. I hardly think there are many "wretched" counters now. So, I might take profits off tables if they give me dividends "in advance" for the next 3-5 years. I already got 6 years dividends from CMPH. I do not like increasing "principal size" for the sake of it so that "dividends" increase and then getting worries about "how long and higher can market go".

So perhaps, XIRR tracking is sound? But that is too technical for me to understand ask cw I cannot even understand why capital injection and profit taking should be -ve and +ve

It then dawn on me that I have a piecemeal approach to my end goal, shouldn't I be a bit more consistent in income investing?

Then I go back to why I track my portfolio.

I have several honest answers, that are mine alone.

1) I want to show off to the bloggersphere that I made a lot of good calls to "buy" and "sell"

2) I want a post that has good view counts.

3) I want to see if anyone had any opinions about the counters I owned, and since I also use others portfolio as a basis of radar to do first cut screening, I want to return this favor too.

However, looking at my own list above, it is very obvious that the list do not include "under-covered" counters, most have been talked about highly in forum or blogs, any value adding if any, should be more in dept analysis of individual companies so that I might add new perspectives. Hence the top 2 reasons are main reasons which hardly should be called a "good reason". As for 3) simply listing the counters should suffice.

One positive did emerge from this exercise.

After realization of the piecemeal approach to tracking, I realized I do have an approach just that it might not be nice to be tracked/ presented and that it is not robust enough

I want "insurance" in terms of cash, and I want to build a big portfolio when the market is lower. Read here.

Both my wife and I are more than 50% cash.

This is not the time for full investment, although we can slowly "trade" when a counter is momentarily low and harvest in advance 2-4 years of dividends as we wait again. Such an "trading" mentality should be "lesser" in my wife account.

Seriously, when I was at my previous workplace. I always wonder why my HOD is so serious, and care so much about what others think or say. I more "潇洒”,then, they say what they want lor.

Now that I am in her shoes. I totally understand her. First, there is some image at play here. When I first did a presentation in my new workplace, I managed to get everyone crackling in laughter. I was rather proud of myself, but was told off by my P and reminded by my colleague not to talk "nonsense"

Also, truth to be told, there are many areas I am not strong at, and because I have a bigger role and job scope now, those things which I used to do well are more poorly executed now.

It's really like dejay vau, when my assistant for House of Horror told me very kindly and gently that we could be more efficient in deploying people to work. I felt I was given a slap as this what I told my boss last time.

Of course, I pick up her suggestion immediately.

However, I decided to be myself and immerse myself with people that "click",

Carrying on with my nonsense and to the hell with "competence"

I seriously do not think I can match last year results with my batch of pupils this year.

And adminstration is my weakness and it will continue to be.

I can only earnestly and humbly learn and suck thumb when necessarily.

But yeah, I really felt a load off my shoulder when I get back my feel of "siao sai", the bo chap and to the hell with what u think attitude. Perhaps only shortly before I will feel

Like a loser again.

I cannot leave my role now, it's too late, I can only do it my way and to my best of ability, my style.

I could be the Lousiest. So be it la.

WTF. Yeah!

Hey, bro and Mei Mei, let's go for breakfast before we start our house of Horror.

Huh? Don't command respect? Huh someone can do it better. Sorry huh, when it's time for u to take over me, I will gladly pass it to you.

To establish the earning powers of golf business, I look at the numbers of Accordia Golf, the parent of the trust. The numbers look quite good, with dip in 2009 and 2011 due to GFC and 2011 earthquake. Yet profits are resilient. I like.

I dig deeper, wanting to know if the numbers are due to organic and inorganic growth.

Although I must give credit to their cost management skills, as expenses remain stable too.

So what gives?

The revenue per golf course is going down.

It is the restaurant segment and driving range that is offsetting the weak numbers.

Given all numbers are in Yen in the parent reporting numbers, there is no currency weaknesses at play here. It is all operating numbers.

But the trust only owned Golf Courses, which revenue generating capabilities has been stagnant at best. But the Driving range which has been is growth strategy as highlighted by the company since 2007, and also a mean to sell merchandise is not include in the trust

Hence the other growth engines are not at play here with the trust.

No wonder the parent wanted only less than 30% stake in the trust.

They are holding on to their crown jewels.

Also, I tried googling top 100 golf courses in Japan, there are many boasting hosting of International Championship or spectacular views

None can be found in the trust.

http://www.top100golfcourses.co.uk/htmlsite/country.asp?id=84

With its price at current low, and it's pluses and minuses in operation, is it a good buy.

I would think it is quite a good yield play nonetheless.

But i feel ok seeing accordia price going up after doing my research.

So I will let the boat go.

(Added at 2030hrs)

Will I buy? If I am 50% cash, I might nimble. But I have less than that since I have buy back more sembcorp industries.

I believe I might have a cigar puff moment when they announce quarter result.

Friday, July 17, 2015

I am not sure if you have such a question/ remark when you do your company prospecting/ research.

After doing your due diligence, both qualitatively and quantitatively, you like what you saw, and the only problem you have is, you would rather it be at a slightly lower price, or you felt you should have gotten in earlier.

So the next remark I usually have in my mind in: I will put it in my radar screen and will get it when it is cheaper.

The problem is, when it is indeed cheaper, it is cheaper for a reason, so do we invest?

I saw from CW post that he bought OSIM recently.

Truth to be told, I was watching OSIM too, maybe not in great details, but I do think that TWG brand hold great promise and with a good balance sheet (abeit due to fund raising), and with a more respectable yield of close to 4% now than just a few months ago, it did look rather "cheap" overall.

But I didn't. I want to keep ammo dry, and I wonder how long will TWG capex expansion bear fruits, and how long the retail weakness in general will last.

My own example- Sembcorp Industries.

I sold 1 lot away much earlier at a higher price, and I thought $4 might be a attractive re-entry price.

It did make a bid at $3.8 but I didn't get it. But what the heck is the difference between 3.8 and 3.85 when I am only buying an additional lot. Truth to be told again, I lack the balls and conviction.

Sembmarine's drill ships problems with Petrobas and competition of utilities and lower rate at home, etc.

It was just months ago when many were screaming "cheap" at $4.40, so it is $3.9, why is it not cheaper?

The question is not why it fallen from $4.4 to $3.9, just google it and you will plenty of answers. The real question is, it is possible to get Sembcorp at $3.9 WITHOUT the bad news that you see now.

I think if you want to get a company cheap, you can, provided you are looking at

1) Small caps with minimum coverage.

Otherwise, we really need to look beyond the bad news and challenges and ask ourselves what is next and what is the longer term earning powers.

But how do we calculate DCF and earning powers conservatively? Earnings can fall by a lot during bad times and you will start questioning your calculations and assumptions. Of course we can have really conservative input in our calculations, but that would most probably mean we have to wait till sentiments is really bad to get our valuation, and do you still have the balls with you then?

I am looking at companies that have people questioning its moat. For example, Sembcorp industries and SIA engineering.

SIA engineering face the problem of new engines requiring less maintenance, and rightly, we should be worried especially since they have already cut dividends, a signal that management themselves wish to conserve cash.

So how do you keep your convictions that a company can "turn", it is still some valuation calculations or was it some qualitative analysis (Perhaps from the angle of insider) that gave you the confidence?

Or you simply do asset re balancing and know the bigger picture will sort itself out?

Thursday, July 16, 2015

I am a believer that i cannot time the market. I still believe in that.

My portfolio is now half of what it used to be. And my bonuses has gone into boasting my emergency fund.

Strange just last December I am busy using my EY bonuses to buy various counters.

I took a hard look at myself and realized that since I only have "significant" savings during my bonuses months, I should be really prudent in my use of ammo.

Just 6 months ago, I wanted very much to increase my portfolio size and increase cash flow from my portfolio (dividends$

Now, I just wanted a warchest for a plain 5-10 % correction and a insurance for a simple 20% bear.

It is also easier now. When some counters (yangzijiang and singapore shipping ) do perform better after I sold them, I realize that discomfort is very much easier to bear as compare to the very nagging question of how much higher can market go?

I did ask my wife to start buying M1 and Ascendas hospitality recently. I am private wealth manager now. Unlike LP who really manage the money. I offer my mouth, advice only, and it will be followed. But my commission is only a treat of a good meal when profit taking materialized lol. Glad I had 2-3 such meals so far LOL.

I crave for savings more than dividends now.

Also, while I am still prospecting for companies, very often, I will come

To this question, compare with A or B that I am looking at... Er... Then I cannot bring myself to dig deeper.

Also, I have come to terms that my analysis of companies is rather short sighted.

I look at the AR, surf the net and try to project their earnings base on their business, while I have more hits than misses, I realized these projections usually cannot go further than 2-3 years and there are just too much missing info.

Products demand changes and market cyclicals will tilt the earning power, I figure out I am better off just looking at track records of management and buy at the low or in general market low sentiments rather than predict what is the killer product.

I might still try my hands on some fairly valued counters or activate my "wealth manager" status to nimble. But I have to be patient and wait for a better price.

Looking at kids now, thinking about my time, I wonder if they will be better off than me. Having experince 2 schools with very different profile of kids, I belived affluence is a double edged sword.

With affluence, kids are more exposed, and more cognitive developed. It is not just about the tuition, it's also the cultural assets poured in since pre-school. The development of the brAins, the linking of the left and right brains etc. They are more informed, more articulated, and confident.

I find "poorer" kids, in general, (there are always exceptions a plenty), more innocent, pure and caring.

They are slower in grasping concepts and have problems in transferring knowledge across domains.

If I look back at myself, I am

Basically stupid, lazy, and problematic in today teachers' eyes. But I am

Independent and I need no parents' guidance nor tutors in my academic pursuit.

Young parents of recent years, how do u feel about homework of your kids in P1. I am all for parents involvement in kids education but it cannot rested on the premises that parents' support can be counted on. Those with parents' support generally do better than those with none. But where is the independence in learning and where is the equity in education if tasks are assigned and we allow parents to help kids in "show and tell" preparation? I know of irresponsible mum who left their kids alone with maid while she holiday for weeks and the dad work overseas. Then they are people

Struggling to put rice on table. Although there are definitely fewer such families now then in my time.

I am no "doctor" or in any occupation that pays very well. I believed with money, you can groom

Your kid to be one with a high flying job readily with constant tuition etc.

A neighbor of mine was a lecturer in a local university. I was very very surprised when he told me the PRC scholars can't compare to our local pupils. I was like huh, did he get his "subject matter" mixed up. He said the chinese on overseas scholarship are usually those with doting parents which provide for all the answers their kids required. Now that they are overseas with their first dose of independent, many are fumbling. Affluence is not restricted to Singaporean

Perhaps, as parents, who want the best for our kids, and with a good job, it is one problem less- money problem.

Indeed, money is a problem in Singapore if u dun have enough.

Who fear of not having enough? I, the middle income people. Not sure if people more well off than me has the same worries , but I am quite sure many others with less than me managed more. More kids, perhaps.

Of course, if we are aware of affluence trap, we can avoid it or minimize it. I know of kids with "filthy rich parents" who are very humble and caring. They are independent too.

But seriously, I seldom find kids that are poor but with parents caring enough to be among those who totally "give up" on themselves. They simply struggle and suffered from Lower self-esteem, a path which I went through before too.

Pupils who I feel like "slapping" for having no back bone are usually caused by overly doting mothers who kids do not even respect them

Oh ya... Those who bother to come

Up to me and talk to me after they graduated when they see me on the streets, are my CCA kids and those underperforming kids who turn around. Those who are better off in grades already, I am just one of the many tutors in their life. Of course, there are also exceptions. But having taught the lower performing class and high performing class and the % of pupils showing appreciation is constantly significant higher in the lower performing class.

Thursday, July 9, 2015

There are flu medicine, medicine for the heart, kidney, blood pressure and diabetics.

Enough for 4 months.

Consultation with specialist is FOC.

My dad belongs to the pioneer generation. He has a PG card.

This to me, is already free medical service.

Of course, we rather not have this service at all.

But I do think the government/s who makes this possible, deserve credits.

Of course, waiting time to see specialist is long, about 2-3 hours. Add the administrative and prescription waiting time. It's half a day gone. (3-5 hours)

Having first hand experince with my mum and dad at both private and government restructured hospitals, I am well aware of the difference in price in everything, even a piece of dressing cost 10 times more at private hospital. The main difference can be summaried in 3 words: Speed, choice and comfort.

How much is that worth, and whether is value for money is up to different people to decide.

Now, she herself wanted private care. She contributed to her own medical expenses and we allow her. I think that makes her feel better.

She says private hospital very comfortable, and te nurses and doctors more attentive. I agree. Whether that changes anything in terms of health management, I have no comments. Who says money can't buy attention?

I kind of can understand her mentality. When I am totally shaq out at work, I always allow myself to induluge in atas ice-cream or coffee. Although overseas trip still hurts.

While I was with her at the hospital months ago, she told me, saved so much, also cannot bring to grave, she hope to leave some for us, but like to relax a bit.

How would we be like when we are old/ older. We might be very different.